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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 07:46 PM   #61
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by AirJordan
Yah this whole thread is pretty silly now I think about it. Sorry for coming off like an ass, blah blah I have a 100k a year job and I'm only 24. The thing is I by no means want to retire at 35, probably around 50, when I hopefully have 6+ million saved up.
No problem even at 5%.

5%
beg balance add ending balance
24 0.00 65,000.00 68,250.00
25 68,250.00 68,250.00 143,325.00
26 143,325.00 71,662.50 225,736.88
27 225,736.88 75,245.63 316,031.63
28 316,031.63 79,007.91 414,791.51
29 414,791.51 82,958.30 522,637.30
30 522,637.30 87,106.22 640,230.69
31 640,230.69 91,461.53 768,276.83
32 768,276.83 96,034.60 907,527.01
33 907,527.01 100,836.33 1,058,781.51
34 1,058,781.51 105,878.15 1,222,892.64
35 1,222,892.64 111,172.06 1,400,767.93
36 1,400,767.93 116,730.66 1,593,373.53
37 1,593,373.53 122,567.19 1,801,737.76
38 1,801,737.76 128,695.55 2,026,954.97
39 2,026,954.97 135,130.33 2,270,189.57
40 2,270,189.57 141,886.85 2,532,680.24
41 2,532,680.24 148,981.19 2,815,744.50
42 2,815,744.50 156,430.25 3,120,783.49
43 3,120,783.49 164,251.76 3,449,287.02
44 3,449,287.02 172,464.35 3,802,838.94
45 3,802,838.94 181,087.57 4,183,122.83
46 4,183,122.83 190,141.95 4,591,928.02
47 4,591,928.02 199,649.04 5,031,155.91
48 5,031,155.91 209,631.50 5,502,826.78
49 5,502,826.78 220,113.07 6,009,086.84
50 6,009,086.84 231,118.72 6,552,215.85
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 07:46 PM   #62
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by TromboneAl
This is interesting, what you've noticed: Almost everyone on a forum of people, most of whom have successfully retired early and have amassed a lot of dough, recommends low-cost index funds. Wow, that's really significant! Are you paying attention -- read what you've written.

Many of us were like you at your age. If I could go back in time and whisper advice to my sleeping self when I was your age, I'd say this:

Whispering: Hey this is you from the future. Listen: Don't chase performance -- go with low-cost index funds.
Trombone Al,

Let me just ask you a couple of questions.

First what do you think of Bob Brinker?

His Portfolio consists of Fairholme, DODFX, Meridian Growth, VTSMX, etc. i.e. one index fund amongst a bunch of actively managed ones. He is a very respected auteur, and while he is a large advocate of Bogle, he still puts faith in good managers.

Second question:

So you're saying for the next 10 years you'd be more comfortable with

VTSMX
VIVAX
VISVX
VGTSX
VPACX
VGSIX

Rather than

VPCCX (Primecap Core)
DODGX (Dodge and Cox Stock)
DODFX (Dodge and Cox Internationa
TAREX (Third Avenue Real Estate)
RYVPX (Royce Value)
VGENX (Vanguard Energy)

I just can't see it. Indexes may beat 75% of funds, but the ones I list are all top 5% with tenured management
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 07:49 PM   #63
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Thanks Spanky, cool stuff!
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 07:54 PM   #64
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Second question:

So you're saying for the next 10 years you'd be more comfortable with

VTSMX
VIVAX
VISVX
VGTSX
VPACX
VGSIX

Rather than

VPCCX (Primecap Core)
DODGX (Dodge and Cox Stock)
DODFX (Dodge and Cox Internationa
TAREX (Third Avenue Real Estate)
RYVPX (Royce Value)
VGENX (Vanguard Energy)

I just can't see it. Indexes may beat 75% of funds, but the ones I list are all top 5% with tenured management
When you invest in passive funds, you are not bidding on the manager's ability or luck. It's possible that these managers may leave also. It's very difficult to stay on top years after years. In addition, cost does matter. Index or ETF funds are usually cheaper.
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 08:19 PM   #65
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by AirJordan
First what do you think of Bob Brinker?

His Portfolio consists of Fairholme, DODFX, Meridian Growth, VTSMX, etc. i.e. one index fund amongst a bunch of actively managed ones. He is a very respected auteur, and while he is a large advocate of Bogle, he still puts faith in good managers.
I actually had to look up who this is since I've never heard of him. But my reaction before seems to match my reaction after knowing. Why do I care what this guy holds? I'm investing for my future, not to compete with everyone else for who can collect the most money.

Quote:
Originally Posted by AirJordan
So you're saying for the next 10 years you'd be more comfortable with

VTSMX
VIVAX
VISVX
VGTSX
VPACX
VGSIX

Rather than

VPCCX (Primecap Core)
DODGX (Dodge and Cox Stock)
DODFX (Dodge and Cox Internationa
TAREX (Third Avenue Real Estate)
RYVPX (Royce Value)
VGENX (Vanguard Energy)

I just can't see it. Indexes may beat 75% of funds, but the ones I list are all top 5% with tenured management
Absolutely I'm fine with it. Again, you don't need to be number 1 in the measuring contest to retire. It's not a competition. And think about the numbers you just made up (I'm not sure what the percentages are, so I'll just go with what you said). That means 3 out of every 4 people who think they are smart enough to beat the rest of us are wrong.

Now, I'll admit that even though I'm older than you (29), you have about the same amount invested and sock away more per year than I do. I've been doing this only a little over a year. I don't understand one in five words Brewer says either. But index-funds make sense even for the layman.

Doesn't mean you can't aim for the fences and do what you're doing. It all boils down to risk tolerance and clearly defined goals. If you are comfortable with your asset allocation, and feel it's the best way to reach your goals, then I wish you the best of luck.

But for me? Right now indexing just makes sense. Hopefully after a few more years of experience behind me I'll be informed enough to decide if a different approach might work better.
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 08:49 PM   #66
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

READ 4 PILLARS OF INVESTING by William Bernstein

/25 years old with $6 million invested
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 08:50 PM   #67
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

In spite of my tongue in cheek posts - it's not a straight up/down pass or fail. In general expenses and turnover are a relentless drag on performance over long(say 10 yrs or more) periods - a tough bogey.

But I started in 1966 in T Rowe Price New Horizons - 500 index didn't show up till end of 76 or start of 77 - and I chased value, gold, international until the early 90's via pssst Wellesley, Gold and PM, trustees co-mingled International.

I had to learn the hard way over and over more than once that past performance didn't always project forward. In only took 15-20 years to convince me on indexing.

Even then - an active fund with low turnover, low expenses, with a solution to management tenure chasing the value premium or some varient thereof - oh boy!

heh heh heh

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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:04 PM   #68
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by NinjaPigeon
I actually had to look up who this is since I've never heard of him. But my reaction before seems to match my reaction after knowing. Why do I care what this guy holds? I'm investing for my future, not to compete with everyone else for who can collect the most money.

Absolutely I'm fine with it. Again, you don't need to be number 1 in the measuring contest to retire. It's not a competition. And think about the numbers you just made up (I'm not sure what the percentages are, so I'll just go with what you said). That means 3 out of every 4 people who think they are smart enough to beat the rest of us are wrong.

Now, I'll admit that even though I'm older than you (29), you have about the same amount invested and sock away more per year than I do. I've been doing this only a little over a year. I don't understand one in five words Brewer says either. But index-funds make sense even for the layman.

Doesn't mean you can't aim for the fences and do what you're doing. It all boils down to risk tolerance and clearly defined goals. If you are comfortable with your asset allocation, and feel it's the best way to reach your goals, then I wish you the best of luck.

But for me? Right now indexing just makes sense. Hopefully after a few more years of experience behind me I'll be informed enough to decide if a different approach might work better.
2 things, Bob Brinker is one of the better respected financial analysts out there, whose portfolio has made a lot of people very rich (nevermind the qqq call), and he is certainly knows more about the market than everyone here. So I would certainly take his word over just about any poster.

Second, I didn't make up that number. That's the fact about index funds. VFINX, will always be a bottom 70% performer, and other active funds will beat it. It's ok, you guys think one way, and refuse to think that any manager can beat the indexes for the 10 year average. It's fine, it's your money, and aside from the Vanguard Diehards forum, nearly everyone out the realize the merits of active management
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:09 PM   #69
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by TromboneAl

Whispering: Hey this is you from the future. Listen: Don't chase performance -- go with low-cost index funds.
Good one Al!
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:27 PM   #70
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by AirJordan

Bob Brinker... certainly knows more about the market than everyone here.

I would certainly take his word over just about any poster.
You're fun!






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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:28 PM   #71
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

To each, his own. I only own index funds and highly doubt I will ever own anything else. Call me lazy or average seeking, whatever. I pay almost nothing in expenses and no capital gains, since I do not sell the funds and shift around. The funds have not paid out any capital gains either in years, so my tax deferral is almost complete other than dividends. Once I get up the courage to ER, I will slowly tap these funds, and have large capital gains to live off of at 5-15% tax rates.

So I am the market, and if the market averages 8-10% the next decade or so I will be very happy. Would I like 12%? Yes. Can I pick the right active fund to attain it? No. Do I think any funds will beat the market by any margin? No, and if any do, I would never find them anyway.

I have been with Vanguard for years and do not consider any other company.

AJ, I have read that 91.5% of a portfolio's return comes from the selection among asset classes: equity/bonds/cash. So as long as you are in equities, and earning and saving large amounts, you will do spectacularly. I always tell people it is much more important to be invested than what you are specifically invested in.

I have also found the people here to be very nice, even caring, especially if you approach them in a positive way.
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:29 PM   #72
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by AirJordan
...Bob Brinker is one of the better respected financial analysts out there, whose portfolio has made a lot of people very rich (nevermind the qqq call), and he is certainly knows more about the market than everyone here.
AJ, remember a couple of hours ago when you said we "all claim to be indexers"? Now you're absolutely sure Mr. Brinker "knows more about the market than everyone here"?

Do you have any idea of the real identity of the posters on the board? Didn't think so. There's no way you can back up your statement since TromboneAl may actually be Alan Greenspan. Point is, you just don't know who you are talking to so it might be prudent to refrain from making sweeping generalizations that cannot be supported with facts.

We got off to a bad start, and I thought we were finally headed in the right direction. I'm no longer confident that's the case, but I sure hope my doubts are unfounded.

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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:47 PM   #73
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

As to Mr. Brinker, just like with all Guru's, opinions vary:

Quote:
"If you add in the recommendation for up to 5% of P1 into TEFQX which remains down by 80%, then his P1 is about equal to buying and holding the S&P500 since January 1, 2000. If you had to pay any taxes on gains from selling in January 2000, then you are behind."
http://investment.suite101.com/discu...-94#message_94

And, for those interested, there is a Fan Club!

http://home.netcom.com/~fanclubs/BobBrinker/index.html

The beautiful thing about the 'net is that you can find any sort of environment you are comfortable with, even one that reinforces magical thinking like being able to time the market effectively.... did someone say "QQQQ"?



Well... [stifles a yawn] ...time for me to jump back into my comfy little home...





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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:54 PM   #74
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by AirJordan
. . .I didn't make up that number. That's the fact about index funds. VFINX, will always be a bottom 70% performer, and other active funds will beat it. . . .
Well, AJ. I don't think your portfolio is bad or evil. I actually think you have a better plan than probably >70% of your same age colleagues.

But you need to realize that the statement you made above is, at worst, wrong, and, at best, incomplete and misleading.

First, the statement has little meaning without attaching a timeframe to it. Over periods of at least 5 years, most funds do not beat the corresponding index. Over periods of 2 to 3 decades the funds that outperform the corresponding index drops to a very small percentage. Different historical studies come up with slightly different values, but index funds do very well compared to managed funds.

It's important to realize that a fund never has to finish first over any 12 month period to finish first over a 12 year period. A fund could theoretically finish in the lower 30% of competing funds for 10 years in a row and yet beat those funds in overall performance for the decade.

You have an okay plan. You believe you can beat the indexes. Most studies will tell you that historically, over multiple decade time periods, your chances are not great that you can succede, but it's not impossible. And your choices are not wild and dangerous. Worst case, you will earn a little bit less than a lazy indexer. That might upset you a little, but it won't bankrupt you.

Go for it. But keep reading. A great deal of the academic and economic literature doesn't really support your position. What you are hoping to do is not easy.

Good luck.
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 09:59 PM   #75
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

AJ......I don't see what the controversey is. Your plan seems very sound. Select managed funds that will perform in the top 5% over the next decade, invest heavily based on your attractive $100K income and reap the harvest based on your projected 12% - 14% returns. Excellent!

The FI portion of your march to FIRE seems to be in the bag. With that behind you except for turning the pages of the calendar a few times, you ought to start thinking about what you want to do, where you want to live, etc., as you enjoy a long and prosperous ER.

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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 10:06 PM   #76
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Bob Brinker is one of the better respected financial analysts out there, whose portfolio has made a lot of people very rich (nevermind the qqq call), and he is certainly knows more about the market than everyone here. So I would certainly take his word over just about any poster.
He's a distant 2nd to Jim Cramer

Sure is funny how people seek - wink wink - "help" from others and in the end proclaim to have all of the answers. Poke holes in your judgment?? How bout asking the Bobster instead of a bunch of nobodies. Socking away a large chunk of money early will virtually guarantee success even if you invest it all in bull sperm. To each his own, good luck to ya bro.
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 10:07 PM   #77
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by AirJordan
2 things, Bob Brinker is one of the better respected financial analysts out there, whose portfolio has made a lot of people very rich (nevermind the qqq call), and he is certainly knows more about the market than everyone here. So I would certainly take his word over just about any poster.
In that case, why are you here?

Ha
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 10:14 PM   #78
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by REWahoo!
TromboneAl may actually be Alan Greenspan.


You have something there!! Now that you mention it, everytime I see Alan on TV, I think to myself: "Gee, that guy looks like the kind of guy that would save money by sawing rolls of paper towels in half." That's too much for just coincidence. It's gotta be him!!
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 10:16 PM   #79
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by HaHa
In that case, why are you here?

Ha
He wasn't asking our opinion on what we thought of his plan, he was asking for our agreement on his plan. Since that didn't happen, we are all obviously wrong.

I hope I wasn't that much of a know it all when I was 24... oh well, I am sure I was.

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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan
Old 03-01-2007, 10:20 PM   #80
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Re: 24 year old trying to get to millionaire by 35, punch holes in me plan

Quote:
Originally Posted by wildcat
He's a distant 2nd to Jim Cramer

Sure is funny how people seek - wink wink - "help" from others and in the end proclaim to have all of the answers. Poke holes in your judgment?? How bout asking the Bobster instead of a bunch of nobodies. Socking away a large chunk of money early will virtually guarantee success even if you invest it all in bull sperm. To each his own, good luck to ya bro.
Look my argument was basically this, Brinker, and Cramer for that matter, eat sleep and breath stocks, and thus would know more than a person with a normal job, who doesn't focus 100% of their energy on the market. Maybe some of you are that involved with the market and know all of its idiosyncracies. I for one certainly do not, so in that case I defer to someone who does. If people on here know more than Cramer or Brinker good for you, you should start your own newsletter and become multi multi millionaires if it's that easy
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